Horace Mann Mutual Casualty Company v. Bell
| Decision Date | 30 September 1955 |
| Docket Number | Civ. A. No. 1200. |
| Citation | 134 F. Supp. 307 |
| Parties | HORACE MANN MUTUAL CASUALTY COMPANY, an Illinois Corporation, Plaintiff, v. Howard K. BELL, James Mayer, Leo Joe Wesley, J. L. Martin, James Bellar, Jack Rose, Mildred Rose, Cleveland Holland and Bertha Holland, Defendants. |
| Court | U.S. District Court — Western District of Arkansas |
Daily & Woods, Fort Smith, Ark., for plaintiff.
Heartsill Ragon, Paul Gutensohn, Charles A. Beasley, Fort Smith, Ark., Scott & Goodier, Dardanelle, Ark., for defendants.
On August 31, 1955, this case was tried to the Court, without a jury, and at the conclusion of the trial the Court orally announced its decision in favor of the plaintiff. The Court requested counsel for plaintiff to prepare formal findings of fact and conclusions of law. Plaintiff complied with Court's request, and on September 1, 1955, the Court filed the findings of fact and conclusions of law prepared by plaintiff's attorney. On the same date the Court entered its judgment in favor of plaintiff in accordance with the conclusions of law.
On September 8, 1955, the defendants filed a motion for new trial, and subsequent thereto the parties filed memorandum briefs in support of and in opposition to the motion. Thus the motion is now ready for final disposition. After fully considering the motion, the Court has concluded that the original findings of fact, conclusions of law, and judgment were and are erroneous, and should be amended, and that a judgment should be entered in accordance with the amended findings of fact and conclusions of law.
Findings of Fact (As Amended)
Plaintiff issued to the defendant Bell its policy of automobile liability insurance describing a 1950 Plymouth Deluxe four-door sedan which was owned and used by the defendant for pleasure and business as a family car prior to and subsequent to the month of February, 1955. Prior to February 26, 1955, the above-described automobile was the only automobile owned by said defendant. The policy afforded coverage for bodily injury, property damage, comprehensive and $50 deductible collision.
On the afternoon of February 26, 1955, the defendant Bell purchased and received delivery from Koch Auto Sales, Dardanelle, Arkansas, a 1952 Studebaker half-ton pickup truck, paying $50 down and executing his instalment note for the deferred balance of the agreed purchase price plus the amount of an insurance premium for a policy insuring the Studebaker truck against comprehensive and $50 deductible collision issued by the General Bonding and Insurance Company, which policy was orally bound and put into effect by that company's agent at the time of the delivery of the truck on the afternoon of February 26, 1955, and which policy named Howard K. Bell as insured and Bank of Russellville, as its interest might appear.
The defendant Bell had nothing to do with the purchase of insurance on the pickup truck. This transaction was handled entirely by Koch Auto Sales and Nobel Campbell, insurance agent of General Bonding and Insurance Company, and, as a matter of fact, Campbell handled the insurance on all of Koch's sales.
Defendant Bell purchased the pickup truck to conserve his automobile and eventually to replace it. The truck was to be used both in the performance of his duties as vocational instructor of agriculture at the Dardanelle, Arkansas, high school, and for personal, pleasure, family and business purposes. In other words, the pickup truck was to be used for the same purposes his automobile had been and was being used.
On the morning of February 28, 1955, said truck was being used by Bell in the performance of the duties of his occupation as such instructor in the conduct of one of his classes and was with his permission being driven by one of his students and occupied by three others of his students when it was involved in a collision on State Highway 22 at the entrance to the farm on which Bell conducted classes and with a car owned, driven and occupied by the defendants, Holland and Rose and their wives, resulting in damages to the Rose car and personal injuries to Mr. Rose and Mr. and Mrs. Holland.
The defendants, Holland and Rose and their wives, are asserting claims for damages against the other defendants by reason of said collision between the Rose car and Bell's Studebaker truck.
Plaintiff, at the time of the issuance of its policy of insurance described in Finding No. 1 above, and on all dates subsequent thereto, had filed with the office of the Commissioner of Insurance of Arkansas rates for the types and kinds of property damage and public liability automobile insurance coverage which it was authorized to write in this State. Plaintiff had filed rates for private passenger automobiles to be used for "pleasure and business" and same had been accepted and approved by the State Insurance Commissioner. Plaintiff had notified the State Insurance Commissioner in writing that it did not write policies on motor vehicles for "commercial" use and had filed no rates with the Insurance Commissioner for that type of coverage and was not authorized to insure motor vehicles for commercial use in the State of Arkansas at the time of the issuance of its policy described in Finding No. 1 above nor at any time subsequent thereto.
Defendant Bell's said Studebaker pickup truck was an additional vehicle and did not replace the 1950 Plymouth four-door sedan described in the plaintiff's policy referred to in Finding No. 1 above.
In Arkansas farm pickup trucks are customarily rated as private passenger automobiles for purposes of liability insurance.
The policy in question provides, inter alia:
The policy further provides:
Shortly after the accident, and before thirty days had elapsed since the purchase of the pickup truck, the defendant Bell notified plaintiff of the acquisition of the truck and of the accident.
Bell had intended to purchase his liability insurance on the pickup truck from the plaintiff, but did not have time to do so before the accident.
The insurance clause in question, which is often designated as an "automatic insurance" provision, provides that the insurance applies to a newly acquired automobile if proper notice is given and "if either it replaces an automobile described in this policy or the company insures all automobiles owned by the named insured at such delivery date."
The evidence in the instant case clearly establishes that the pickup truck purchased by the defendant Bell did not replace the Plymouth automobile described in the policy. Compare, Mitcham v. Travelers Indemnity Co., 4 Cir., 127 F.2d 27. Thus the crucial question is whether the plaintiff insured "all automobiles owned by the named insured" at the delivery date.
At the time of the trial the Court was of the opinion that this alternative provision applied only to blanket or fleet insurance, and apparently this is the construction placed upon similar policy provisions by the author in Volume 7, Appleman's Insurance Law and Practice, Section 4293. There is also some dictum in Home Mutual Ins. Co. of Iowa v. Rose, 8 Cir., 150 F.2d 201, 204, tending to support the Court's original opinion that the clause applied solely to blanket or fleet insurance. However, Appleman cited no authority supporting his theory, and in addition, the standard policy provisions have been changed since the publication in 1942 of Volume 7.
Apparently the particular provision involved herein has been construed in only one case. In Birch v. Harbor Ins. Co., 126 Cal.App.2d 714, 272 P.2d 784, 786, the Court had before it for consideration precisely the same clause that is involved here. In that case the appellant insurance company contended:
"* * * that the Chevrolet was an additional car rather than a replacement; that the clause with respect to the company insuring all automobiles owned by the insured was `designed to cover situations in which an assured has a constant normal turnover of vehicles' and where the newly acquired vehicles will be identified and added to the policy at a later date, usually the end of the month; and that the provision that the insured shall pay any additional premium required indicates that `the insurer recognizes no obligation to furnish free insurance other than as specifically...
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